A stack of cigarettes in a factory. Tobacco is said tobe the leading cause of preventable death in the world, but local sales of the luxury commodity show that its consumption is on an upward trend
Consumption trend. The number of people consuming tobacco has grown from 1 billion three years ago to 2.3 billion. The smoking incidence is higher in Kenya, followed by DR Congo and then Uganda at between 5 per cent and 10 per cent of the population.
The cigarette business is rich with controversies. And the controversies around it intensify with research findings stating that smoking harms nearly every organ of the body and diminishes a person’s health.
Despite all the health risks it poses to the smokers and those exposed to it (passive smokers), it seems the trade is thriving as evidenced by the sales figures surging from about 1 billion sticks to more than 2 billion in about two to three years.
Industry players say they want to raise that figure further. This, they say, will be possible if they are able to keep up with what the market wants.
In the last five years, even with anti tobacco campaigns and draconian laws, tobacco and cigarettes companies have managed to stay afloat, thanks to the willing tobacco farmers, loyal customers and government—which reaps from its revenue contribution.
In an interview with one of the industry captains, it emerged that the last time Uganda’s tobacco industry growth dipped in terms of revenue was in early 2000’s—between 2003/04 and 2005.
“By 1998, the local market was consuming 1.6billion cigarette sticks annually. But since then, it has been growing. And to date we are talking of 2.3 billion sticks being consumed every year,” the managing director, British American Tobacco (BAT), Jonathan D’ Souza, told Prosper magazine last week.
And for the case of BAT-Uganda alone, Mr D’Souza wants his company’s market share to move to 85 per cent by close of the year from the current 83 per cent..
And this means that in nearly five years, BAT-Uganda could have grown its market share by about 10 per cent, given that two years back, the market share was at 76 per cent.
However, the biggest threat to the industry is illicit trade, which is costing government more than Shs8 billion and eating away at some of the market share of the legally licensed tobacco traders.
Our problem is not the regulation but its application and equity. In any case our internal regulation is even stiffer—yet we are not being regulated by the State to impose them.” said the new BAT-Uganda boss.
He added: “Together with government we must bring illicit trade to an end because all that revenue should be heading to the national coffers and not in the hands of the illicit traders.”
Although Mr D’Souza appeared to downplay the impact of the current legislation on tobacco, on grounds that businesses will always find a way to exist, should the legislation be passed in its current form, tobacco industries and all that feed off it might find it hard to survive.
“The law in its present form will not strike the much needed balance between social issues and competing economic interests. But it will end up hurting the people it seeks to protect,” the Private Sector Foundation (PSFU) executive director, Gideon Badagawa, said in a stakeholders meeting.
He argued that the bill in its current shape is restrictive rather than regulatory, meaning any law must be able help businesses operate and not stifle their operations.
Impact of passing the bill
According to the PSFU boss, the private members bill not only contradicts but frustrates President Museveni’s manifesto on job creation and sustenance. He argues that the proceeds got from tobacco help in patching up the foreign exchange loopholes, whose effect on the economy is far reaching.
Those with options will definitely diversify and going by the analyst’s predictions, BAT could be forced to relocate its entire operations elsewhere, with Uganda probably ending up as another market for tobacco products.
Among the biggest losers will be government who will not only be deprived of the much needed revenue but the thousands of jobs the industry provides. The population could also be exposed to dangers of illicit trade. This also means that people will have no choice but turn to crude smoking which poses even more health risks.
But, the brain behind the private members bill, Mr Chris Baryomunsi, the Kinkizi East MP, is not ceding any ground. He is convinced that there is need to protect minors from unwarranted tobacco use and at the same time protect the environment from the tobacco related activities that he said, have devastating effects on the environment.
Experts view
But, according to an expert in the tobacco business, Julie Adell-Owino, regulation of the tobacco industry is paramount. However, she adds that this must be done in a way that spurs rather than stifles the businesses. She believes that both interests can co-exist only if the law regulates the industry fairly.
Important to note is that the industry acknowledges the dangers associated with tobacco use and cigarette smoking. “Advertising and sales promotions are one of the sure ways of promoting brands and growing volumes, but we decided as a business not to venture into that area,” said Mr D’ Souza.
BAT has already invested in research to produce products that have minimal or no health risks, but progress on that front is still a long way off.
By ISMAIL MUSA LADU The Daily Monitor